A Business-Level Strategy: Pfizer Inc Essay Example
Pfizer Inc. is a research-based international pharmaceutical corporation that discovers, expands, produces and promotes drugs for both humans and animals, in addition to customer products. Pfizer is known to be one of the world’s prevalent and most prosperous pharmaceutical ventures. The company is a worldwide pioneer in human pharmaceuticals, as well as comprising an enormous selection of consumer health care, sweet foods, and animal health care manufactured goods. The company was integrated as Charles Pfizer & Co in the USA in 1942, but the prior trade goes back to a joint venture established in 1849. This company manufactured only citric acid, but then decided to develop into other substances and pharmaceutical products. A chapter of fast expansion initiated with the creation of penicillin in World War II, and the emerging of the partnership’s most eminent product, Terramycin antibiotics, back in 1949. Founded on this strong point, Pfizer escalated in the 1940s and 1950s throughout parallel incorporation in the USA and via in-house progress. All the way through record, Pfizer was able to attain prizes, awards and honors in fields counting business and financial operations, corporate control, employee interactions and workplace community, and patronage. In March 2011, Pfizer placed first in the medicine and health care business in a yearly standing carried out by Antal International, a universal managerial search company. In February 2011, Pfizer Ecuador has been awarded the initial-position “General Ruminahui” award for its corporate responsibility plans by the Pichincha local government. Diario Médico, a daily trade periodical addressing Spanish health care experts, has named Pfizer’s Torisel as one of the “Best Ideas of the Year.” Pfizer has also been privileged by China’s Ministry of Commerce, Executive Committee of Foreign Investment Companies for its aid of a Chinese establishment that offers complimentary cataract operations to patients within China. Pfizer’s chief rivals are Merck, SmithKline, Novartis, Brystol Myers Squibb, Glaxo, BSE Midcap and CSE Midcap Abbott Laboratories and Johnson & Johnson(Accolades).
The foremost goal of Pfizer is to build enduring and sustainable value for its shareholders. As a pathway to that objective, Pfizer seizes the enhancement of admission into health care in modes that progress Pfizer’s status among people governments, and portray new horizons for everyone. Pfizer has initiated a comprehensive access strategy devoted to increasing fresh business models that will facilitate admittance to superiority drugs in a profitably feasible reasonable approach for patients suffering the obstacles into central health care. Pfizer is significantly concerned and interested in key partnerships with governments, nongovernmental foundations, private organizations, and health care specialist. An example of this would be the partnering with Grameen Bank in 2008 and the acquisition of Wyeth on January 2009, thus aspiring to augment and evolve in the future throughout widening the scope of customers, investors and target external and internal markets.
The health care industry, or medical industry, is the sector of the economic system that provides goods and services to treat patients with curative, preventive, rehabilitative or palliative care. The modern health care sector is divided into many sub-sectors, and depends on interdisciplinary teams of trained professionals and paraprofessionals to meet health needs of individuals and populations. The health care industry is one of the world’s largest and fastest-growing industries. Consuming over 10 percent of gross domestic product (GDP) of most developed nations, health care can form an enormous part of a country’s economy.
In order to study Pfizer’s external analysis and plunge deeper into its boundaries, maps, industry analysis and trends, it is beneficial and dexterous to use the Michale Porter’s Five Forces of Competitive Position Model(Figures1-6). The first three sources of horizontal competition comprise of product substitutes, recognized rivals, and new industry contestant. The other two sources, however incorporating a vertical competition, exhibit the features of bargaining power of suppliers and buyers. The intimidation of a new product’s substitution tends to be far above the ground or near to the ground, thus relative to what type of product is being offered. If two identical products exist within the market, then there’s a noticeable risk of a new-product replacement. Zyrtec (Pfizer), allergy medication encounters remarkable rivalry from alternative products due to the accessibility of new and inexpensive generic hypersensitivity products. When a product is inimitable, then a lower hazard of replacement exists. As a prudent solution to such an issue, Pfizer has not stood still helplessly, but was determined and rapidly recognized the circumstance through taking the route of a proactive attitude against threats, and hence manufacturing and promoting itself, some generic versions of their own medicines via a broad auxiliary known by the name of Greenstone. One of the generic versions of Greenstone is Zoloft (Pfizer), a generic version to Sertraline (Pfizer). Other drugs within this array include Toframine, Norpramine, Elavil, Serzone, Luvox and Remeron.
Competition from new trade contestants is relatively elevated as a result of cost obstacles, capital needs, brand recognition and government guidelines. New entrants are confronted to reach out allocation canals, hire enormous sales strength, and transact with operating disbursements before any drug is accepted to be put for sale. Financial resources’ requirements within the pharmaceutical commerce will keep new entrants from accessing the market, since venturing in novel technology, equipment, and raw materials, is considerably intricate and costly. Furthermore, gaining the customer’s loyalty through new drugs will require a great and intensive deal of investment and marketing. As for government policies, pharmaceutical industries find themselves restricted with such regulation. To wrap up Porter’s Model, we come across bargaining force of consumers. Pfizer’s bargaining power is relatively high, since the company deploys several offerings of the same medicine, and the buyers execute purchases in great amounts. But not in the case of Pfizer’s Viagra which was highly priced after it was first initiated, thus regarding this very drug, bargaining power of buyers would be low, since the medicine is unique(Competitive Landscape).
Pfizer’s major rival is Abbott Laboratories, a global, diversified (multi-division) pharmaceuticals and health care products business. It employs over 90,000 employees and deploys within more than 130 countries. The company is based in Abbott Park, North Chicago, Illinois. The firm was established by Chicago physician, Dr. Wallace Calvin Abbott in 1888. In 2010, Abbott comprised over $35 billion of returns(Figures 8&9 show comparisons of both companies). Pfizer obviously shows advantage over Abbott Laboratories in terms of profits earned. Also two other rivals are BSE Midcap and CSE Midcap(See figure 14 for comparisons).
The assets that the firm owns are its resources. And according to Robert M Grant in Contemporary Strategy Analysis, Pfizer’s main resources come across as tangible, intangible, and also human resources. Pfizer tangible sources are directly associated with its funds and its free cash flow. The firm’s latest sale of consumer products department to J&J for$16.6Bn, will not only bring about additional free cash flow, but will more importantly allow Pfizer to make use and acquire wise business prospects. David Shedlarz, Deputy Chairman of Pfizer, said that the company is constantly attaining powerful cash flow as a result of operations. Cash flow was projected to surmount the verge of $16Bn in 2006. As for the intangible resources, Pfizer has technology and reputation. Technological sources comprise the intellectual property and the R&D. The firm’s intellectual property and R&D are exceedingly loaded with patents, licenses, and copyrights. In 2006, Pfizer earned approval of Celebrex, Geodon, Lyrica and Stutent, in addition to three new entries of Eraxis, Exubera and Chantix. Pfizer has over $17Bn to expand its spectrum of new drugs. Pfizer’s reputation does not only show in surveys, but through unique drugs giving the company an enormous advantage, hence named by Working Mother magazine, as one of the 100 best Firms for working women for 7 consecutive years. Whereas the firm’s human resources encompass knowledge, experience and mutual skills. Pfizer employs more than 100,000 workers worldwide, where the firm’s philosophy emphasizes and encourages intellectual power and diverse opinions. Pfizer’s preeminent scientists are vastly paid. The company’s philosophy permits it to adapt to all changes encountered(Strategy)(Figures 11& 12 showPfizer’s financial and shareholding patterns for 2011).
In return to the demanding working milieu, Pfizer has taken many initiatives to reinforce its status and better situate itself for upcoming prospects. The most significant of these steps was the acquirement of Wyeth, which has altered the firm into a more expanded healthcare corporation, with product offerings in human, animal and customer health, including vaccines, biologics, small molecules and nutrition across up-and-coming markets. Pfizer believes that the acquisition and incorporation of Wyeth, importantly and through a single attempt, ameliorates each of the strategic precedence it has acknowledged and chased over the last couple of years, counting:
- Improving its aligned and patent-protected channel portfolio in major “invest to win” regions where there’s significant unfulfilled medical necessities and noteworthy occasions for originality and market headship, such as pain, swelling, oncology Alzheimer’s disease, psychoses and diabetes.
- Becoming a pioneer biotherapeutics company by 2015;
- Surging growth in promising markets;
- Creating new opportunities for reputable products; and –
- Investing in complementary businesses.
Pfizer believes that the comprehension of these strategic main concerns via the acquisition of Wyeth boosts its prospects to:
- Drive improved performance through its exclusive and supple business model, which is built on a group of responsive and decidedly responsible Units, backed by the resources of its worldwide endeavor.
- Reinforce the chance for reliable and steady income enlargement through product hand-outs within copious mounting Curative regions and a diversified product selection in 2012.
- Make the most of quickly progressing scientific originality into more multifaceted quarters so to concentrate on proceeding with sizeable unfulfilled medical requirements.
The pharmaceutical market is in rapid constant change, and Pfizer utmost strategies to cope with such a facet include, the expansion in new geographic sites and high-development zones, enhancements in operations, and aiming at diversified and mounting patient populations. Ian Read, President and Chief Executive Officer, stated, “Our performance this quarter was in-line with our expectations.” Frank D’Amelio, Chief Financial Officer, stated, “Given our performance during the second quarter as well as our continued confidence in the business, we are reaffirming our 2011 financial guidance and 2012 financial targets.” In order for Pfizer to expand its share of the $22Bn market for painkillers, it has acquired King Pharmaceutical Inc. for $3.6Bn, thus confirming that the most fundamental aspect and core philosophy within the company, is to acquire new companies and expand in new critical target markets.
Pfizer must inquire about the following:
- Where is it now?
- Where is it going?
- How will it get there?
- How will it know it has arrived?
- Create a clear term of its intangible business resources. Including values, beliefs, attitudes, and potentials. What are they?
- What industry is it in (retail, wholesale, finance, manufacturing, durable or non-durable goods and so on) and what are its trends?
- What is the economic condition (interest rates, costs of labor and materials, unemployment levels, consumer demand, inflation and prices) and how will it affect its business?
- What is the narrow environment and how does it influence its business?
- What are the up-and-coming technologies and how might they impinge on its business?
- Customer relationship
- Product inimitability
- Operational superiority
- Performance advancements
- Time and effort put on resolving conflicts and crises.
Success and progress are evident when output and sales increase with the surging demand within the market. Achievement can be perceived as soon as returns increase. Expanding the scope of the business and developing in further areas, in addition to acquiring new companies and adapting with change, will certainly bring about remarkable accomplishments and profits.